The economy has a huge impact on all aspects of our lives. Its health – and, of course, our resulting individual financial situation – will determine the amount of disposable income that we have available for fun things like trips and new toys not to mention necessary expenses like our kids’ university tuition and savings for a future retirement. It won’t surprise you, therefore, to know that the economy, whether it’s going gangbusters or slowing right down, will have an effect on the success of your dream granny flat.
A robust economy means that the employment rate is low, businesses are bringing in profits and there is an increase in the availability of goods and services. If you have opted to be a landlord, your granny flat will be one of these items available on the rental market for potential tenants.
The good news is that there won’t be a shortage of potential renters in a busy, healthy economy, which will enable you to be selective in choosing the person – or people – you invite to live in the rental space that’s adjacent to your own family home.
The more negative news is that you won’t be able to charge quite so much in rent. This is because a lot of units will be available in a housing situation where houses are selling easily and homeowners don’t have any difficulty getting the needed funds to build their own granny flats.
A slow down or correction in the economy might not be a desirable situation but this type of circumstance can still bring benefits to you as the owner of a granny flat. For one thing, when the economy is less robust, the number of people buying their own homes diminishes which means that renting is an even more popular choice.
In addition, during an economic downturn the logic of combining resources by living together might start to appeal to your common sense, inspiring you to invite your own (or your spouse’s) granny to sell her own house and make a home in your cozy outbuilding.
There are a lot of financial advantages to family living closer together, including having a trusted relative nearby to pitch in for childcare and cutting costs by eating together and not paying the transportation expenses required to visit when living farther apart.
Whether the economy has slumped a little bit or is picking up steam, as a granny flat owner you will be a good position to reap the rewards of your real estate choices.